Co-Signer and Guarantor Policies for Rental Applications: A Landlord's Guide

Sooner or later, a promising applicant will fall just short of your screening standards, such as a graduate student with no rental history or a new hire whose first paycheck has not landed. A co-signer for an apartment, more precisely called a lease guarantor in most leases, can turn that near miss into an approval without lowering the bar for everyone else.

The catch is that guarantors only protect you if you choose them carefully, screen them lawfully, and apply the same rules to every applicant. This guide walks through the difference between co-signers and guarantors, when to accept one, how to set rental guarantor requirements, and how to write a policy you can defend. It is part of our tenant screening hub for independent landlords and small property managers.

Note: This article is general education, not legal advice. Guarantor, screening and fair housing rules vary by state and municipality and change over time. Consult a local attorney before adopting a guarantor policy or guaranty agreement.

Co-signer vs. guarantor: what each one actually signs

In everyday conversation, landlords and renters use "co-signer" and "guarantor" as if they mean the same thing. Legally, they can describe two different arrangements, and the label on your form matters less than the obligations written into it.

A co-signer usually signs the lease itself, next to the renter. Most leases make all signers jointly and severally liable, which means each signer owes 100 percent of the rent and other charges, and you can pursue any one of them for the full amount. In some arrangements the co-signer also lives in the unit.

A guarantor usually does not sign the lease as a tenant. Instead, the guarantor signs a separate guaranty agreement promising to pay if the renter does not. The guarantor has no right to occupy the unit. Depending on the wording, a guaranty can be a guaranty of payment (you can go straight to the guarantor once rent is unpaid) or a guaranty of collection (you must first try to collect from the renter).

This guide uses "guarantor" for anyone who backs a lease without living in the unit. Whatever you call it, have a local attorney confirm the document says what you think it says.

When accepting a guarantor makes sense

A guarantor fixes one gap: a likely good renter who misses one financial standard on paper. It does not fix serious red flags such as falsified documents.

Common situations where landlords allow a guarantor include:

• Students or recent graduates with little income and no credit file yet.
• Applicants starting a new job who have an offer letter but no pay stubs.
• Applicants with thin or damaged credit but steady income.
• Applicants whose income is just below your rent-to-income standard.
• Applicants new to the US with no US credit history.

For that last group, a guarantor is only one option. Many applicants can document income and history in other ways, which is covered in our guide to screening rental applicants who do not have a Social Security number.

Decide in advance which shortfalls a guarantor can cure and which it cannot.

Setting rental guarantor requirements

A guarantor backs someone else's rent on top of their own housing costs, so most landlords hold guarantors to a higher standard than renters.

Income and assets

There is no legal standard for guarantor income. In high-cost markets such as New York City, rental guides commonly report that landlords ask renters to earn about 40 times the monthly rent per year and guarantors to earn about 80 times the monthly rent. In other markets, landlords often apply a higher multiple to guarantors than to renters, commonly up to about double the renter standard. Treat these as ranges people use, not rules.

Illustrative example with round numbers:

• Monthly rent: $2,000
• Renter standard at 40x: $2,000 x 40 = $80,000 per year
• Guarantor standard at 80x: $2,000 x 80 = $160,000 per year
• Same guarantor standard expressed monthly: $160,000 / 12 = about $13,333 per month

If you accept verified liquid assets in place of some income, define what counts and how much. Our article on income verification best practices for rental applications covers which documents to request and how to spot problems.

Credit and history

Set a minimum credit score for guarantors, usually at or above your renter minimum, and decide which negative items are disqualifying. If you are still choosing your renter threshold, our guide to choosing a good credit score threshold for renting walks through common cutoffs.

Location and enforceability

Some landlords require guarantors to live in the United States, or in the same state, because collecting from an out-of-state or overseas guarantor can be slow and expensive. If you adopt a location rule, apply it to everyone, and do not use it as a stand-in for national origin.

Screening the guarantor lawfully

Get written authorization first

Under the Fair Credit Reporting Act, you need a permissible purpose to pull a consumer report. The FTC's guidance for landlords notes that written permission from the person is one way to show that purpose. Because a guarantor is not a rental applicant in the usual sense, the cleanest approach is a signed authorization from the guarantor before you order any report. Many screening services also collect the person's consent through their own process.

Adverse action notices are your job

If information in a consumer report leads you to deny an application, require a guarantor, or ask for a larger deposit, the FTC treats that as an adverse action. The FTC lists "requiring a co-signer on the lease" as an example. When you take adverse action based on a report, the landlord, not the screening company, must give the applicant a notice that includes:

• The name, address and phone number of the consumer reporting agency.
• A statement that the agency did not make the decision and cannot explain it.
• The person's right to dispute inaccurate information and to get a free copy of the report within 60 days.

If you reject a guarantor because of their own report, the guarantor is the person entitled to the notice. If you used a credit score, additional disclosures apply. Confirm current requirements on ftc.gov or consumerfinance.gov, and see our step-by-step playbook for tenant screening compliance requirements for the full workflow.

A written policy applied consistently

The biggest fair housing risk with guarantors is inconsistency. If you waive the guarantor for one applicant and demand it from a similar applicant, or set a higher bar for some applicants than others, you may invite a discrimination claim under the federal Fair Housing Act or state and local law.

A written policy forces you to decide the rules before you see an applicant, and gives you something to point to if a decision is challenged.

Two points deserve special attention:

• Source of income. Many states and cities ban discrimination based on lawful source of income, including housing vouchers. New York City's Commission on Human Rights, for example, tells landlords that when a voucher sets the renter's share based on income, they may not impose additional income requirements or require guarantors or co-signers. See our guide to source-of-income discrimination laws for landlords before applying a guarantor rule to voucher holders.
• Same criteria, same documents. Ask every guarantor for the same application, the same authorization and the same proof of income. Keep the guarantor section of your rental application form and what to include in it as consistent as the renter section.

State and city rules that limit guarantor practices

Guarantor rules are mostly set by contract law, but some states and cities restrict the fees and deposits that often travel with a guarantor. A few examples you can verify:

• New York (statewide). The 2019 Housing Stability and Tenant Protection Act amended Real Property Law section 238-a. It bars landlords from charging application or other fees before or at the start of a tenancy, except for background and credit checks, which are capped at the actual cost or $20, whichever is less. General Obligations Law section 7-108 limits security deposits to one month's rent for most units. In practice, that means you cannot charge a separate "guarantor fee" or demand a larger deposit in place of a guarantor.
• New York City. As noted above, the Commission on Human Rights says landlords may not require guarantors from voucher holders whose rent share is based on income.
• California. Under Civil Code section 2819, a surety (which includes a guarantor) can be released if the creditor alters the original obligation without the surety's consent. A guaranty that does not address renewals, rent increases or lease amendments may not cover them. Many guaranty forms include a consent or waiver clause for this reason; have an attorney review yours.

Other states and cities differ, so confirm deposit caps, fee limits and source-of-income protections where your property sits.

Institutional guarantor companies as an option

Not every applicant has a parent or relative who can qualify. Institutional guarantor companies act as the guarantor for a fee paid by the renter, often calculated as a percentage of the rent. If the renter defaults, the landlord files a claim with the company under the terms of its agreement.

If you accept these companies, put that in your written policy and evaluate each provider the same way:

• How much of the rent the guaranty covers, and for how long.
• What the claims process requires and how quickly claims are paid.
• Whether the coverage follows renewals or ends with the first lease term.

Sample written guarantor policy outline

Use this outline as a starting point and adapt it with your attorney:

1. Purpose. Guarantors may be offered to applicants who meet all screening criteria except the specific shortfalls listed below.
2. Eligible shortfalls. Income below the rent-to-income standard, credit score below the minimum, or no rental or credit history. Specify which disqualifiers a guarantor cannot cure.
3. Guarantor qualifications. Minimum annual income (for example a stated multiple of monthly rent), minimum credit score, and any residency requirement.
4. Accepted alternatives. Whether institutional guarantor companies are accepted and on what terms.
5. Screening and consent. Signed authorization, the same reports run on renters, and the documents required.
6. Adverse action. Who sends notices and how they are recorded.
7. Local law exceptions. Source-of-income rules, fee caps and deposit limits that override this policy.
8. Signing and storage. How the guaranty is signed, where it is kept and for how long.
9. Review date. When the policy will be reviewed and by whom.

How to sign and store the guaranty

Have the guarantor sign the guaranty agreement at the same time as, or before, the renter signs the lease. A guaranty signed weeks after move-in can raise contract questions about what the guarantor received in exchange for the promise. Attach or reference the specific lease, including the address, term and rent.

Confirm the guarantor's identity and give them a copy of the lease they are guaranteeing. Electronic signatures are generally valid under federal and state e-signature laws, but confirm your process meets local requirements.

Store the signed guaranty with the lease, the guarantor's signed authorization and the screening results. Keep everything for the full lease term, any renewals, and long enough afterward to cover the time it may take to resolve a deposit dispute or collection claim.

Frequently asked questions

Can a landlord require a co-signer for an apartment?

Generally yes, if the requirement is part of a written policy applied equally to all applicants and does not conflict with local law. Some places, such as New York City for many voucher holders, restrict guarantor requirements.

How much should a lease guarantor earn?

There is no legal standard. In New York City, landlords commonly look for about 80 times the monthly rent in annual income, while landlords elsewhere often set a guarantor standard up to about double their renter income standard.

Do I need permission to run a credit check on a guarantor?

Get the guarantor's written authorization before ordering any consumer report. It documents your permissible purpose under the Fair Credit Reporting Act, and many screening services collect it as part of their process.

Is requiring a guarantor an adverse action?

The FTC says requiring a co-signer can be an adverse action when it is based on information in a consumer report. In that case, the landlord must send the applicant an adverse action notice.

Does a guarantor stay liable after the lease renews?

It depends on the guaranty wording and state law. Some states can release a guarantor when the lease is changed without their consent, so many guaranties address renewals explicitly.

What to do next

A guarantor policy only works when every step happens the same way for every applicant: the same qualification standards, the same consent and reports, the same documents, and a signed guaranty you can find years later. Small landlords usually stumble when guarantor paperwork is scattered and nobody can prove what was asked of whom.

Shuk handles the parts that need to be consistent. Tenant screening runs through a screening partner, with credit, criminal background and eviction reports, pass criteria you set such as minimum credit score and rent-to-income ratio, and document requests for photo ID and proof of income, while you make the final decision. Optional income verification and employment verification reports help you confirm an applicant's finances. Unlimited Adobe-powered e-signatures let renters and guarantors sign the lease and guaranty agreement you prepare, and Property Documents keeps the signed guaranty with the lease inside each property.

At as low as $2 per unit per month, with no setup fees and no contract, and with White Glove Onboarding included at no additional cost, Shuk makes a consistent, well-documented guarantor process feasible for landlords and property managers up to 200 units.

Book a demo at shukrentals.com/book-a-demo to see how screening with landlord-set pass criteria, e-signatures and Property Documents work together so every guarantor decision is screened the same way and every signed guaranty is easy to find.